Managing in an Uncertain Economy
Dr. Alan Beaulieu is one of the most well-respected economists providing economic forecasts with over 95% accuracy. You can learn more about Dr. Beaulieu’s forecasts on his company’s website, ITR Economics. For now, we want to share three key pieces of advice on preparing yourself for the next recession. Over the next several newsletters, we will be building on this concept to include information on selling and buying in an uncertain economy in addition to managing in an uncertain economy.
We will be seeing the steepest recession we have seen since the Great Recession in 2022 that will last into 2023. There will be a mild downturn at the beginning of 2020. So, what can you be doing now? Dr. Beaulieu explains that the slowdown is the time to do the things you have put off when you are “too busy,” to be mindful of your own rates of change, and look for the “Basset Hound” of your organization.
When you are very busy, ask yourself: what do you wish you had more of? Do you wish you had a new piece of equipment that would reduce turnaround time or a new CRM to better manage your client relationships? Now is the time to identify these needs, and the downturn is the time to make necessary changes that will improve efficiency and productivity.
The traditional mentality is that you shouldn’t spend money during a slowdown. As we discussed, that isn’t necessarily true, although you do need to be mindful of your own rates of change. Are the changes you are considering making going to grow your business without the infrastructures in place to sustain that growth? Can the level of growth you are suggesting withstand a recession? Are the plans you are making aimed at improving efficiency and productivity? If you haven’t thought through these questions, you may want to pause before making any big decisions.
Dr. Beaulieu also suggests ridding your company of any “Basset Hounds.” He identifies four areas they may exist:
- Product or Service – is it wasting time? Has the product or service stopped being useful or generating revenue?
- Place – with multiple locations, are you holding onto a location that isn’t successful because it is a legacy, or you keep holding onto hope that it will turn around?
- Process – are you asking for a report that you don’t really need? Is the way you are shipping the most efficient it could be?
- Person – do you keep them on because they are well liked, even if they aren’t meeting your company standards?
Dr. Beaulieu refers to Basset Hounds as something you don’t need but keep around anyway. He says that Boomers are often blind to the basset hounds in their organizations, but Millennials can see them. He encourages you to listen to their thoughts and suggestions on change because “the resources you free up will help you on the way up.”
If you are thinking about selling your business between 2020 and 2030, the time to start working with Sunbelt Business Advisors is now. Start your exit strategy planning today to ensure you are exiting your company on top.